In which situations is tendering more commonly used?

Tendering is more commonly used in situations involving high-value or long-term contracts due to several key factors. When a contract is substantial in terms of financial implications or duration, it typically attracts a higher level of scrutiny and competitiveness. The tendering process allows organizations to invite multiple suppliers to submit proposals, ensuring that they can thoroughly evaluate different options and select the best value for their investment.

High-value contracts often necessitate a formalized process to manage risk effectively, maintain transparency, and comply with regulations and organizational policies. The tendering procedure helps organizations mitigate potential issues such as supplier reliability and quality assurance by allowing them to assess the capabilities and track records of various suppliers. Additionally, a longer-term contract tends to warrant a more rigorous selection process to ensure that the chosen supplier can fulfill the ongoing requirements over an extended period.

In contrast, single-source contracts typically do not involve tendering since they rely on selecting a specific supplier without competitive bidding. Casual agreements and short-term purchases are often negotiated directly and do not require the formalities of a tendering process, as the amounts and commitments involved are lower and less complex. This context reinforces why tendering is particularly relevant and essential for managing high-value or long-term contracts effectively.